by Joan Eliyesil ·
Friday, June 21, 2024
When, in early 2023, the state published the total amounts that each of the 351 towns in Massachusetts would receive from seven opioid settlements, the numbers for Harvard, as compared with its neighbors, practically jumped off the page.
Based on the latest settlement figures, Harvard, with a population of about 6,000 and few reported opioid-related emergency calls or deaths in the state’s Department of Public Health data, will receive a total of more than $620,000, 14 times as much as nearby Lancaster, and 33 times as much as Shirley, both more populous and with higher opioid overdose emergencies and deaths than Harvard.
For over a year, the Press has been investigating the cause of Harvard’s windfall and it has concluded that the reason lies with an allocation formula developed during opioid settlement negotiations. The formula was created to determine town and city shares of opioid settlement funds in counties that were unable to do that work themselves. Massachusetts and several other New England states used the formula, which was based on operational spending in certain categories, the largest of which were schools and municipally owned hospitals. As a result, opioid fund allocations favored towns that spent more and, because spending data for regional schools wasn’t included in the calculation, penalized towns in regional school districts. Here’s what happened.
As settlements in the nationwide lawsuits brought against opioid manufacturers, distributors, and pharmacies for the part they played in the opioid epidemic were being negotiated, a committee of lawyers for state and local governments and public health experts developed an allocation model that states could use to distribute settlement funds to counties, cities, and towns.
In the model, described in detail in the document “Class Counsel Memorandum: How the Allocation Model Works,” shares for each county in a state would be calculated using a formula based on federal data on opioid use in the county and amounts of opioids shipped to the county. Allocation of settlement money to the cities and towns within each county would be left up to county governments to negotiate.
But some states, including Massachusetts, Connecticut, Rhode Island, and Vermont, have weak or no county governments capable of handling the allocation of opioid settlement funds. The committee also anticipated that some counties might be unable to agree on how to share funds with the towns within their borders, so it created a method to calculate settlement percentages for towns. Unfortunately, federal data on opioid use, deaths, and distribution was not available at the town level, so the committee turned to a different data source. It used a survey distributed by the Census Bureau every five years to local governments across the country: the Census of Governments Survey of State and Local Government Finances.
Using the 2012 survey, the committee chose nine local government functions that were “potentially relevant to opioid abatement.” Those categories were elementary and secondary education, public welfare, hospitals, health, police protection, fire protection, corrections, housing and community development, and judicial and legal. To apply the town allocation model for a state, each town’s 2012 operational spending on the nine functions was calculated, and it was assigned a percentage of spending based on how much all the towns in the county spent, as well as anything the county government itself might have spent on those functions. This is the model Massachusetts chose to use to allocate money to its 351 towns.
Data from the 2012 Census Bureau’s survey results verified that, in Massachusetts, the percentage each town received of its county’s allocation was identical to its county spending percentage. Harvard, for instance, will receive 1.36% of Worcester County’s total opioid settlement, and Harvard spent 1.36% of the amount that Worcester County towns reported spending in 2012 on the nine opioid-related government functions defined in the allocation model. Data for towns in Connecticut, Rhode Island, and Vermont followed the same pattern—percent of county allocation equaled percent of county spending.
As a result, in states like Massachusetts that used the allocation formula developed by the settlement lawyers, towns that spent more, got more. Spending on elementary and secondary schools accounted for nearly 82% of the total spent on the nine categories in this state, making it the major factor in determining Massachusetts town shares of the settlement.
Using operational spending to allocate county funds did have the effect of funneling larger shares of a county’s allocation to its cities and large towns, which typically have bigger opioid problems than small towns. In Worcester County, the City of Worcester, with about 200,000 people and 822 opioid overdose deaths in the past eight years, received the largest allocation. But dividing each Worcester County town’s allocation by its population shows that Worcester, although it received the county’s largest allocation, did not receive anywhere near the most money per person. That distinction belongs to Harvard, whose allocation came to $113 per person using the town’s 2010 census numbers compared to Worcester’s $79 per person.
The inequity didn’t end there. Towns in regional school districts were not given credit for educational spending on any schools they didn’t directly administer. The amount towns paid an “intergovernmental agency” to operate a school was reported in a section of the survey that was not included in the calculation that determined settlements. For the purpose of determining town allocations, Bolton’s educational spending for 2012 was considered $0, while Harvard’s was over $17 million. With educational expenses accounting for such a large portion of county spending, towns that got no credit for regional school spending received a fraction of the allocation towns with their own school districts got. A few towns in regional districts operate their own elementary school, and those that did so received credit for that spending, but not for any of the money paid to another entity to run the regional high school.
Whether the way regional schools were handled in the spending calculation was a deliberate decision or an oversight is unknown. In Massachusetts, over 60% of the towns in Franklin and Berkshire counties received zero credit for educational spending because they were in regional school districts. In Worcester County, 47% of towns had no educational spending for the same reason. Towns with opioid problems that happened to be in a regional school district, such as Ayer in Middlesex County and Athol in Worcester County, suffered the most from this omission, as settlement money flowed into towns with their own school systems but minimal opioid problems. Athol, a town of nearly 12,000 people and 231 opioid-related EMS calls over the past four years, will receive only about $136,000 in settlement money, about 22% of what Harvard will receive.
There were other inequities caused by basing allocations on spending. Hospital operating expenses, the largest expense in the nine spending categories, skewed allocations in favor of cities that operated a hospital, such as Cambridge. Towns that paid firefighters or EMTs spent more on those services than towns with volunteer departments.
It’s unclear exactly how many states used the model for local allocation defined by the negotiators. It is mentioned in many of the agreements between states and their subdivisions as an option if no other agreement can be reached. Even if the model was used elsewhere, it may not have produced the same degree of inequity that it has here in Massachusetts. In Vermont’s 2012 survey results, for example, towns reported either zero or a few thousand dollars in school operational expenses. The lion’s share of those expenses was reported by school districts, none of which participated in the litigation. As a result, the regional school anomaly didn’t happen in Vermont. It did happen in
Connecticut and Rhode Island, though.
The percentages allocated to towns are written into each of the seven settlement agreements that Massachusetts is part of and, according to the Office of the Attorney General, the percentages cannot be renegotiated.
Because Massachusetts chose to use the default intra-county formula instead of opioid-use data to divvy up town shares of the settlement, it now finds itself with money sitting unused in hundreds of for-opioid-remediation-only town accounts. The rules for municipal spending of settlement funds are strictly defined by the state and focus on prevention, harm reduction, treatment, and recovery. For towns like Harvard with a minimal opioid problem and hundreds of thousands of dollars to spend, there are few choices that make sense.
Payments from the seven settlements began in 2022 and will continue for at least the next several years, with final payments from the various defendants arriving between 2028 and 2038. At its May 7 meeting, the Select Board voted to spend $9,300 of the $151,863 the town has received so far for listening sessions, to be conducted by the Boston-based firm Public Consulting Group. The results of the sessions will be a report documenting the needs of the community. It also voted to allocate $4,900 to the Ambulance Service for a laptop, internet, software, medical supplies, marketing materials and printing, and naloxone distribution advertising.
The board has not yet voted on Police Chief James Babu’s requests: $40,000 for a portable narcotics detection system (TruNarc), $9,000 for a device to provide safe handling of fentanyl for officers, and $24,000 to produce a community outreach video. The Select Board reviewed the requests at its May 21 meeting, which was also attended by a representative from TruNarc.
Incoming Board of Health member Brad Holub contacted Care Massachusetts, an organization hired by the state to provide support for the use of opioid settlement funds, asking for advice on spending guidelines; specifically, whether the chief’s equipment requests were allowable expenses. Care team member Carly Bridden responded that Care Massachusetts “does not recommend using opioid abatement funds for items such as supplies for EMS, Fire, or Police Departments; drug detection equipment/TruNarc devices; and fentanyl ventilation hoods. Based upon our understanding of the Massachusetts Abatement Terms these would not be considered allowable expenses.” Bridden recommended that the Select Board wait for the listening session findings “before making substantial expenditures with these funds, especially if there is not an urgent and clearly evident need.”
At the Select Board’s June 4 meeting, Board of Health Chair Sharon McCarthy also asked the board to wait on any further spending requests, and asked it to approve a working group, led by the Board of Health, that would use the results of the listening session and state guidance to make spending recommendations. At its June 18 meeting, the Select Board agreed it would discuss McCarthy’s working group request at a meeting later this summer.
Census Bureau Disclaimer
In its 2012 State and Local Finance Public Use Files Disclaimer, the U.S. Census Bureau asks that any release of 2012 State and Local Finance data be accompanied by the following reliability and cautionary statements:
- Because the Census Bureau has not reviewed the individual unit data as separate time series, caution must be exercised in their use and interpretation.
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- These data may contain high levels of non-sampling error. Non-sampling error can be attributed to many sources: errors in coverage of the universe of governments, nonresponse, differences in the interpretation of questions, mistakes in the recording and coding of data, and other errors in collection, processing, and tabulation of the data. Although no direct measures of non-sampling error are available, steps have been taken in all survey processes to minimize their influence.
Individual data units are edited in an effort to reduce response errors and processing errors. Data for nonresponse units are imputed in an effort to mitigate the effects of nonresponse. A discussion of the methodology and processing used for the Annual Surveys of State and Local Government Finances can be found at https://www.census.gov/programs-surveys/gov-finances/technical-documentation.html under the ‘Annual Survey of State and Local Government Finances Methodology’ tab.
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